The Board of Directors: Creating Balance While Avoiding the Traps

People have many reasons for becoming involved in a board of directors. For example, some find it an excellent way to contribute to their community’s development through a non-profit organization. For others, being involved with a foundation is a way to support a cause they believe in. Still others want to either gain new expertise or contribute their knowledge. However, being a board member is generally so rewarding and prestigious that many people still seek to become board members for the prestige, without asking themselves what they can contribute.

The board of directors plays a crucial role in an organization’s structure and takes on very important responsibilities in respect of that organization. For this reason, each member’s contribution is a determining factor and should therefore be one of the key considerations when deciding to become involved in a board of directors. Similarly, recruiting board members should not be taken lightly. The organization’s health and sustainability depend on these decisions. As such, the roles and responsibilities of this function must be understood from the outset.

The role of directors and management

The board of directors and management are responsible for an organization’s governance. In defining governance, the Collège des administrateurs de sociétés refers to the International Federation of Accountants’ definition:

The set of responsibilities and practice s exercised by the board and executive management with the goal of providing strategic direction, ensuring that objectives are achieved, ascertaining that risks are managed appropriately, and verifying that the organization’s resources are used responsibly.

Directors therefore play a fundamental role in terms of the organization’s mission and values as well as its strategy, policies and compliance, among many others. Directors are also responsible for measuring the organization’s results, performance, and compliance with governing legislation and regulations. The board also safeguards the interests of the organization’s members and shareholders.

Management, for its part, handles the organization’s day-to-day activities. It implements the organization’s strategies, manages activities to create value and ensures the organization’s efficiency.

Board members have complementary roles that must be fully understood by the various stakeholders to ensure efficient organizational governance.

The director’s duties

Becoming a board member implies taking on a number of duties that have to be diligently discharged. Board members must be ethical, responsible and, above all, accountable. They must, therefore, attend meetings and be well prepared in the face of the entity’s challenges. Additionally, they are required to comply with the board’s code of ethics so as to avoid conflicts of interest.

Smaller organizations must very often call upon volunteer directors who should ensure that as directors they are appropriately motivated so they can actively support management in dealing with limited resources and budgets.

Traps to avoid

Too often, organizations have a board of directors where the roles of management and the directors are either not clearly defined or overlap. Such unproductive situations frequently lead to governance and communication problems between the board and management and can significantly hamper the organization’s development.

Additionally, board members are often individuals who, though dedicated, do not necessarily have all the requisite skills to fulfil their mandate. They may have been recruited because someone in management knows them, or because they have voiced an interest or have a specific skill, which does not necessarily mesh with the entity’s strategic directions. Board members must use judgment and be independent when selecting members.

Ideally, board members should not have similar profiles. A diversity of profiles, experience and expertise promotes discussion and, to a certain extent, a competitive spirit. Selecting board members requires as much care as selecting an organization’s employees.

There are many ways of assessing a board’s effectiveness. They can serve to determine if the board’s membership is appropriate and if it is operating in an optimal manner. Members can be assessed by third parties or by a peer review, for example, using anonymous questionnaires in specific contexts. Such evaluations provide a means for taking the necessary corrective measures and avoiding problems. Additionally, they can help to pinpoint expert profiles that can be called upon to benefit the organization.

In sum, before joining a board of directors, you need to question your motivation, as this will have a direct impact on the organization. Boards of directors, for their part, can use a variety of means to ensure their quality and effectiveness.

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Successfully Integrating New Employees

When a new employee begins to work for an organization, it’s an important step for both of them. Though stressful, a new recruit’s first few days can go more smoothly if certain strategies are implemented.

Successful integration

The integration of a new employee should follow a very simple premise: the employee must feel comfortable and welcome in the new environment. Such a premise applies to all employees, whether they have been on the job market for a long time, are new to the market, or senior executives. The success of this integration is a determining factor when it comes to an employee’s ability to adapt quickly to the new environment, and reducing the risk of resignation shortly after starting. Such resignations are costly in terms of time and resources, let alone the potential impact on the organization’s image.

Four simple and efficient steps

To support the integration of a new employee, we can refer to a four-step process:

1. Prepare the new employee’s welcome: When a new employee arrives, it’s in the employer’s interest to plan the welcome. The employer can advise the other employees of the upcoming arrival of a new resource in the near future and the role they will play with respect to this resource, prepare a schedule and corporate documents for the first day to help the employee get a better grasp of the enterprise’s values and mission. Furthermore, an informal meeting between the new employee and the rest of the team before the first day of work can be a wise way to promote exchanges and reduce first-day stress. This way, a signal is sent that the new hire is appreciated and important. It also enables the new employee to find his or her place and quickly become fully functional within the team.

2. Welcome: On the first day of work, it’s important to give the employee enough time to feel guided and have a sense of belonging. This step will influence the employee’s relationship with the company. This is also the day when corporate documents are provided. The latter must be complete yet concise to facilitate their integration. Lastly, it’s often a good idea to introduce the new resource to other employees (support staff, in other departments, etc.) so that he or she may see and understand the enterprise in its entirety.

3. Integration: In the days following the new employee’s arrival, keep in mind that complete integration will take a few days, perhaps even a few weeks. Meeting colleagues, providers and clients and grasping the tasks of the position takes time. To be efficient, the new resource needs to know who does what, form a network, and assimilate the enterprise culture. To do so, he or she needs support. Not only must the supervisor or immediate superior handle this step, but all team members and eventually a mentor must do their part.

4. Follow-up: In the short term, the employer must give the employee feedback and adjust the position, if necessary, based on the employee’s strengths and weaknesses while redistributing tasks within the team.

Such a procedure can seem costly because certain employees must set aside their tasks to support the new hire. However, it’s usually worth the investment. There are numerous examples where mentoring or sponsorship enabled the employee to get answers to questions and quickly grasp the organization’s culture.

We should keep in mind that talent recruitment and retention are constant challenges for managers, especially in light of the expected or current labour shortage in various activity sectors. Recruiting personnel takes time and energy; successful employee integration increases the chances of retaining staff and is surely worth the investment.

Successful integration is key to efficiency as the employee will quickly become productive and functional, to the organization’s benefit.

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Tax

Staying the course

Federal budget March 22, 2011

Canadian Finance Minister, James M. Flaherty, gave his sixth budget speech today entitled A Low-Tax Plan for Jobs and Growth.

The deficit in 2010-11 is projected to be more than 25% lower than it was in 2009-10, and it is projected to shrink more than 25% again in 2011-12. The deficit is projected to continue to decline to $0.3 billion in 2014-15. It is expected that there will be a surplus of $4.2 billion in 2015-16.